In our fourth and final article on TiECon 2014, we summarize the Internet of Things (IoT) market opportunites and advice for entrepreneurs, as described by Sandy Carter, IBM VP & General Manager of IBM Ecosystem Development during her TiECon IoT keynote speech on May 16th. Consistent with the theme of TiECON, Ms Carter addressed where IoT entrepreneurs should concentrate their time and what they need to do to succeed.
Sandy contrasted the common vs. unique aspects of the IoT, identified three customer use cases and several common roles, examined consumer vs. enterprise focus, and suggested where new innovation and investment can produce material improvements over the next several years. It was a very well researched and clearly presented talk.
As one might expect, investment and opportunities in the IoT are expanding rapidly. And that will continue for many years. By 2020, it’s forecast that $300B in incremental revenue will derive from IoT products and services (source of that forecast was not identified).
Three items are needed for the above IoT forecast to be realized, according to Ms Carter:
- Focus on domain knowledge expertise, value drivers, and design (focus on outcome- not the devices(s)).
- Integrated solution that includes data analytics and cognitive computing along with monitoring sensors.
- Ecosystem that includes many different types of vendors, service providers, software suppliers and system integrators.
The IoT opportunity exists by vertical industry segment rather than a single monolithic market (which confirms what all IoT market researchers have said to date). The top ranked IoT industry verticals (in order of revenue opportunities) are: auto, healthcare, industrial, retail, asset management, utilities/energy, home monitoring & control/building automation.
When selling IoT solutions, vendors and service providers must target the right buyer within the company they’re trying to sell to. For example, the IoT solution provider should determine if it is the facility manager vs IT manager vs department head. Value driven use cases will also be important for the IoT provider to demonstate solutions for the industry segment(s) relevant to the targeted customers.
IoT Integrated solution opportunities identified were:
- Data collection at $87B
- Analystics at $237B
- Cognitive Computing at $370B
- Data analytics that are optimized for each customer was said to be a $180B opportunity in 2016.
Note: The timeframe for the first three forecasts were not mentioned during Sandy’s keynote. The source noted on the slide was an Harbor Research report: Where will value be created in IoT, April 7, 2014. When attempting to search on line for same, we could only find a 2013 forecast from that firm:
IoT Collaboration Examples:
1. IBM is working with Honda to collect data related to battery performance in electric vehicles (EV) on the road. The objective is to analyze massive amounts of data to better determine how those EV batteries operate. To improve battery life and perfomance, the data will be optimized for decision making. That will result in increased EV performance and enhanced customer satisfaction.
Other IoT opportunities for EV were said to be: device performance, maintenance contracts, warranties/recalls, and customer service.
2. IBM is working with the Flint River Basin Partnership to collect, analyze, and optimize data from various sensor readings. The objective is to make more informed irrigation scheduling decisions to conserve water, improve crop yields and mitigate the impact of future droughts. That will be done by analyzing and optimizing unstructured sensor data to predict irrigation needs based on weather conditions or crop health. The result of this collaboration will be the deployment of innovative conservation measures to enhance agricultural efficiency by up to 20 percent.
An extension of the above opportunites would be to utlize mutliple protocols and technologies to collect and analyze data from many different devices. Then to merge and reconcile that unstructured data from multiple input sources.
3. Streetline (http://www.streetline.com/company/in-the-news/) has been working with the city of Los Angeles on an optimized parking solution. The system collects and analyzes parking spot data and makes decisions to optimize parking spot usage. This has reduced traffic congestion and resulted in increased motorist satisfaction. It’s also generated more parking revenue fo the city of L.A.
Note: Sandy predicted that over 100B sensor readings would be made daily by 2020 (she didn’t say whether that was global or just for the U.S.)
Suggested IoT Ecosystem Value for Entrepreneurs:
- End to end technology and business monitoring
- Raise capital/ procure investments
- Scale globally- using one or more partner companies or a network of companies
- Mentoring as a recipe for success
- Cloud connect your thoughts (meaning that part of the solution is data analytics/number crunching/cognitive computing in the cloud)
- Address security and privacy concerns in the provided IoT system solution
The connected car was presented as an IoT ecosystem example. The IBM Watson Cloud, with over 1700 developers, was given as an example of IoT cognitive computing (probably the best cloud solution available in this author’s opinion). For more information on Watson: http://www.ibm.com/smarterplanet/us/en/ibmwatson/ecosystem.html
Summary and Conclusions:
What really matters (reiterated):
- Focus with domain knowledge as driver of value. Concentrate on long term growth, revenues and profits.
- Offer an Integrated solution: collect, analyze, optimize data.
- Build an ecosystem with mentoring, capital and global scale.
To succeed in the IoT marketplace a company must provide an integrated solution (likely with one or more partner companies) that collects, analyzes, and optimizes unstructured data from “things.” Then design, operate and manage.
From her keynote speech, it’s clear that Sandy Carter recognizes the opportunities available in leveraging the Internet of Things (IoT) for both established corporations (like IBM) and entrepreneurs alike. She also provided valuable insight into what it takes to be successful in this large, emerging market.